ORLANDO, Florida, March 26 (Reuters) – The price of stocks, bonds and gold fell sharply on Thursday while oil surged, as fading hopes for de-escalation in the Middle East reignited inflation fears and left investors approaching the quarter end in a deeply gloomy mood.
In my column today I look at why, despite war, $100 oil and deep economic and policy uncertainty, the U.S. equity outlook may still be bullish. Barclays strategists just raised their S&P 500 forecast, and they’re not lone wolves on the Street either.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
Today’s Key Market Moves
Today’s Talking Points
* The land of fake believe
One day, markets rally after U.S. President Donald Trump says his administration has presented Iran with a peace plan and the two sides are communicating, even though Tehran denies it and says the plan is one-sided. The next day, markets tumble on pretty much the same headlines and newsflow.
Who to believe, and when to believe them? It’s difficult to say, and there’s no obvious rhyme or reason to how markets respond. Investors could do a lot worse than simply buying after a down day, and selling after an up day. If truth is the first casualty of war, no wonder investors are floundering.
* Bond auction blues
Thursday’s $44 billion auction of 7-year U.S. notes was pretty terrible – weak demand, a big tail, and dealers left with a sizeable slice of the offer. It was a similar story in Wednesday’s 5-year auction and Tuesday’s 2-year sale.
Investors are clearly rattled by energy prices, war in the Middle East, and inflation. With the total of foreign central bank-owned Treasuries in custody at the Fed falling sharply too, these are nervy times for Treasury. And markets in general.
* Technically speaking
If the U.S. economic “fundamentals” aren’t looking that great for stocks, the “technicals” are also starting to turn sour. Wall Street’s three main indices have all broken below the 200-day moving average, a chart level that often provides long-term support or resistance, depending on the market’s direction.
Technical analysis has its critics, but when big levels like 200-DMAs are breached, more investors take notice. “Nothing good ever happens below the 200-day moving average,” investor Paul Tudor Jones allegedly said. Market bottoms and the start of rebounds happen, although it could be some time.
What could move markets tomorrow?
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(Reporting by Jamie McGeever; Editing by Nia Williams)
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